FIN 420 EXAM 1 PRACTICE QUESTIONS & ANSWERS
A couple in their early 30s has been married for four years. They're disposable income
is relatively high and they are planning to buy a condo. If they need a safe place to
invest their down payment for six months which of the following mutual funds is the
most suitable for these clients. - Answers :cash reserves money market fund
All the following types of securities contribute to more risk and should be reviewed in a
fund prospectus, except - Answers :treasury securities
All the following correctly, describe disadvantages of cash and cash equivalents except
- Answers :an investor may quickly convert a money market deposit account to cash to
meet short-term needs
All of these statements correctly identifies a separately managed account except -
Answers :separately managed account is an account that holds each share of stock in a
separate account; investor's sometimes have at least a dozen accounts with one share
in each one
And investor is interested in buying a stock today for $25 the stock is currently trading at
$25.50. What is the best type of order to place - Answers :De order
And investors only interested in investing in the stock of companies with at least $50
billion market capitalization and provide some income. Which type of function of the
investor consider. - Answers :large caps stock funds
and investor is seeking to conserve principal, pay current income, promote long-term
growth. Which fund is most appropriate - Answers :balanced fund
an investor owns an investment that is an unmanaged portfolio in which the money
manager initially selects the securities to be included in the portfolio and then holds
those securities until they mature or the investment portfolio terminates. this statement
best describes which type of investment - Answers :Unit investment trust
And investor wants the maximum return on equities and is willing to take on maximum
risk. The investor is comfortable with exposure to small companies in the US and
emerging growth companies. The investor is seeking to beat the return of an index.
Which function of the investor consider. - Answers :aggressive growth funds
Choose the risk that is attributable to cash and cash equivalents - Answers :Purchasing
power risk
ETS generally offer which of these
1. Tax efficiency.
2. Low expense ratios.
A couple in their early 30s has been married for four years. They're disposable income
is relatively high and they are planning to buy a condo. If they need a safe place to
invest their down payment for six months which of the following mutual funds is the
most suitable for these clients. - Answers :cash reserves money market fund
All the following types of securities contribute to more risk and should be reviewed in a
fund prospectus, except - Answers :treasury securities
All the following correctly, describe disadvantages of cash and cash equivalents except
- Answers :an investor may quickly convert a money market deposit account to cash to
meet short-term needs
All of these statements correctly identifies a separately managed account except -
Answers :separately managed account is an account that holds each share of stock in a
separate account; investor's sometimes have at least a dozen accounts with one share
in each one
And investor is interested in buying a stock today for $25 the stock is currently trading at
$25.50. What is the best type of order to place - Answers :De order
And investors only interested in investing in the stock of companies with at least $50
billion market capitalization and provide some income. Which type of function of the
investor consider. - Answers :large caps stock funds
and investor is seeking to conserve principal, pay current income, promote long-term
growth. Which fund is most appropriate - Answers :balanced fund
an investor owns an investment that is an unmanaged portfolio in which the money
manager initially selects the securities to be included in the portfolio and then holds
those securities until they mature or the investment portfolio terminates. this statement
best describes which type of investment - Answers :Unit investment trust
And investor wants the maximum return on equities and is willing to take on maximum
risk. The investor is comfortable with exposure to small companies in the US and
emerging growth companies. The investor is seeking to beat the return of an index.
Which function of the investor consider. - Answers :aggressive growth funds
Choose the risk that is attributable to cash and cash equivalents - Answers :Purchasing
power risk
ETS generally offer which of these
1. Tax efficiency.
2. Low expense ratios.
